PT Saratoga Investama Sedaya Tbk, one of Indonesia’s most active infrastructure, natural resource, and consumer sector investment companies, has initiated talks with strategic investors for a co-investment partnership as it continues to bet big on rising opportunities in Indonesia.
The company is currently evaluating multiple options including Saratoga Investama funding on its own, opening a new successor fund or co-investing with a strategic partner to tap opportunities in Southeast Asia’s largest economy.
Saratoga Investama is a public listed investment company while Saratoga Asia Capital is a buyout private equity company with the same principals. The two firms co-invest in companies.
Saratoga Investama invests almost $100 million annually in companies in Indonesia or global firms with a link to the Southeast Asian country. It focuses on investment opportunities in the early-stage, growth stage, and special cases with emphasis on three key sectors including consumer, infrastructure and natural resources.
Saratoga Investama CFO Jerry Ngo told DEALSTREETASIA, “The next phase is really whether Saratoga Investama should continue to invest on its own or should it continue to co-invest with LP funds.”
The firm is being approached by strategic investors who are keen to enter Indonesia and participate in its growth as co-investors. “The company will continue to focus on their main business, i.e. finding out good deals in the pipeline, investing into right partners, growing them and bringing them to a stage where you could either monetize or look for investment,” Ngo said.
According to the management, the firm generates enough dividends and divestments to allow it to cover operations, interest expense and future investment.
“We have enough monetization to allow us to deploy and share part of gains to shareholders, that will continue. The company also has access to the debt market, so going to public market helped us, in order to tap those funding sources. So the next phase is really whether Investama should continue to invest on its own, or go with new partners,” Ngo added.
So far, the company has seen continued interest from Chinese, Korean and Japanese investors. Ngo said the firm will consider LP-GP structure and is looking for partners that will bring in specific skill sets such as expertise in water management industry or health care.
Some of Saratoga’s recent investments in healthcare have been Awal Bro Hospital group in 2016 and Deltomed, a leading herbal remedy player in Indonesia. It has also invested in cold chain logistic warehouse MGM Bosco in the infrastructure space and Mitra Pinasthika Mustika, a consumer automotive company.
Some of its older investments include Indonesia’s leading mining and energy group Adaro Energy in 2002, and Indonesia’s power generation firm, Medco Power, which it backed in 2011.
Currently, the group has more than 20 subsidiaries, many of which are public companies listed on the Indonesia Stock Exchange like coal producer Adaro Energy, tower operator Tower Bersama Infrastructure, plantation firm Provident Agro and leasing company Mitra Pinasthika Mustika.